RIZAL COMMERCIAL BANKING CORPORATION v.

COURT OF APPEALS and GOYU

FACTS:
GOYU applied for credit facilities and accommodations with RCBC. After due evaluation, its key officers,
Uy and Lao, recommended GOYUs application for approval by RCBCs executive committee. A credit facility in the
amount of P30 million was initially granted. Upon GOYUs application and Uys and Laos recommendation, RCBCs
executive committee increased GOYUs credit facility to P50 million, then to P90 million, and finally to P117 million. As
security for its credit facilities with RCBC, GOYU executed two real estate mortgages and two chattel mortgages in favor
of RCBC, which were registered with the Registry of Deeds. Under each of these four mortgage contracts, GOYU
committed itself to insure the mortgaged property with an insurance company approved by RCBC, and subsequently, to
endorse and deliver the insurance policies to RCBC.
OYU obtained in its name a total of ten (10) insurance policies from Malayan Insurance. In February 1992,
Alchester Insurance Agency, Inc., the insurance agent where GOYU obtained the Malayan insurance policies, issued
nine endorsements in favor of RCBC seemingly upon instructions of GOYU.
On April 27, 1992, one of GOYUs factory buildings in Valenzuela was gutted by fire. Consequently, GOYU submitted its
claim for indemnity on account of the loss insured against.
Malayan Insurance denied the claim on the ground that the insurance policies were either attached pursuant to
writs of attachments/garnishments issued by various courts or that the insurance proceeds were also claimed by other
creditors of GOYU alleging better rights to the proceeds than the insured. RCBC, one of GOYUs creditors, also filed with
Malayan Insurance its formal claim over the proceeds of the insurance policies, but said claims were also denied for the
same reasons that Malayan Insurance denied GOYUs claims.
ISSUE:
Does RCBC, the mortgagee, has any right over the insurance policies taken by GOYU, the
mortgagor, in case of occurrence of loss? YES!
RATIO:
On Insurable Interest
It is settled that a mortgagor and a mortgagee have separate and distinct insurable interests in the same mortgaged
property, such that each one of them may insure the same property for his own sole benefit. There is no question that
GOYU could insure the mortgaged property for its own exclusive benefit. In the present case, although it appears that
GOYU obtained the subject insurance policies naming itself as the sole payee, the intentions of the parties as shown by
their contemporaneous acts, must be given due consideration in order to better serve the interest of justice and equity.
It is to be noted that nine endorsement documents were prepared by Alchester in favor of RCBC. The Court is in a
quandary how Alchester could arrive at the idea of endorsing any specific insurance policy in favor of any particular
beneficiary or payee other than the insured had not such named payee or beneficiary been specifically disclosed by the
insured itself. It is also significant that GOYU voluntarily and purposely took the insurance policies from MICO, a sister
company of RCBC, and not just from any other insurance company. Alchester would not have found out that the subject
pieces of property were mortgaged to RCBC had not such information been voluntarily disclosed by GOYU itself. Had it
not been for GOYU, Alchester would not have known of GOYUs intention of obtaining insurance coverage in compliance
with its undertaking in the mortgage contracts with RCBC, and verily, Alchester would not have endorsed the policies to
RCBC had it not been so directed by GOYU.
On Estoppel
RCBC, in good faith, relied upon the endorsement documents sent to it as this was only pursuant to the stipulation
in the mortgage contracts. We find such reliance to be justified under the circumstances of the case. GOYU failed to
seasonably repudiate the authority of the person or persons who prepared such endorsements. Over and above this,
GOYU continued, in the meantime, to enjoy the benefits of the credit facilities extended to it by RCBC. After the
occurrence of the loss insured against, it was too late for GOYU to disown the endorsements for any imagined or
contrived lack of authority of Alchester to prepare and issue said endorsements. If there had not been actually an
implied ratification of said endorsements by virtue of GOYUs inaction in this case, GOYU is at the very least estopped
from assailing their operative effects. To permit GOYU to capitalize on its non-confirmation of these endorsements
while it continued to enjoy the benefits of the credit facilities of RCBC which believed in good faith that there was due
endorsement pursuant to their mortgage contracts, is to countenance grave contravention of public policy, fair dealing,
good faith, and justice. Such an unjust situation, the Court cannot sanction. Under the peculiar circumstances obtaining
in this case, the Court is bound to recognize RCBCs right to the proceeds of the insurance policies if not for the actual
endorsement of the policies, at least on the basis of the equitable principle of estoppel.